Readers of my blog know that I’m a big fan of many software companies. One that could have decent potential over the next 6-12 months is network security firm CyberArk Software (Symbol: CYBR). They develop solutions that protect organizations from cyber attacks. The company offers a privileged access security solution to secure, manage, and monitor account access and activities.
Technicals – Over the past year, the weekly chart is showing strong institutional accumulation (highlighted below). I really like the prior uptrend created during most of 2018 and the current base that is forming over the past 4 months.
Fundamentals – The company is steadily growing revenues around 25% the past 8 quarters. Earnings have accelerated nicely the past 3 quarters and they have a history of strong cash flow. In their last earnings report (Nov 2018), the company reported EPS of 0.48, well above the street consensus of 0.27. Their top-line revenue beat, combined with increased utilization of Professional Services, led to record high gross margins of 88.5%. They also revealed that they now serve 50% of the Fortune 500.
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Full Disclosure – I currently hold a position in this stock for clients (subject to change at any time). The purpose of this blog post is idea generation and to show you how I combine both technicals and fundamentals to help increase my probabilities of a trade working out. It is impossible to guide people how to trade any idea because everyone has different timeframes. If the market cooperates, I feel this is a stock that can appreciate 30-50% over the next 6-12 months. The stock closed Friday (1/25/19) at $80.15 and has strong support at $65. Good luck!
I can be reached at: jfahmy@zorcapital.com.
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